Forexpros – The pound trimmed losses against the U.S. dollar on Tuesday, easing off a seven-and-a-half month low, but gains were limited after inflation data released earlier failed to dampen speculation over further easing by the Bank of England.
GBP/USD pulled back from 1.5761, the pair’s lowest since January 25, to hit 1.5822 during European afternoon trade, still down 0.25% on the day.
Cable was likely to find support at 1.5582, the low of January 12 and resistance at 1.5885, Monday’s high.
Earlier in the day, official data showed that the annualized rate of consumer price inflation in the U.K. ticked up to 4.5% last month from 4.4% in July, in line with expectations.
The increase in CPI was not enough to quell speculation that the BoE may resort to further stimulus measures to support U.K. growth, after a recent string of soft data added to concerns over the fragile economy.
A separate report showed that the country’s trade deficit remained unchanged at GBP8.9 billion in July, quashing hopes that the weaker pound would support export demand.
The pound was also lower against the euro, with EUR/GBP rising 0.27% to hit 0.8647.
Elsewhere Tuesday, German Chancellor Angela Merkel said the top priority for European policymakers was to avoid an “uncontrolled insolvency” for Greece.
Merkel’s comments came a day after her vice chancellor said that Europe should not rule out an “orderly default” for Greece.
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